I have a theory: The amount of Knowledge and quality of Collaboration a company is able to achieve directly effected by the level of Trust all parties have in the company.This is reflected in the potential value of the Innovation.
- Image by yuan2003 via Flickr
(Knowledge x Collaboration) x Trust = Innovation
Knowledge is the raw materials businesses are built on today. All commodities are just that, commodities. Production became a commodity thanks to globalization and distribution became a commodity thanks to the Internet. The only thing that’s left is knowledge.
Knowledge is easy for individuals to gain. Knowledge is itself a commodity - for individuals. Knowledge is a scarcity for companies. The ability to mine the wealth of knowledge inside of the people employed by a company is harder. Add to that the need to mine knowledge from customers and partners and knowledge just became the scarcest mineral on the planet.
Why is knowledge so difficult to gain? Two factors: Retention and Trust.
Retention because we don’t stay at the same job as long as we used to, customers are rarely brand loyal anymore and partnerships are fleeting. None of this is going to change dramatically, which puts an increase on the need for trust.
Employees, Customers and Partners have an inherent lack of trust in corporations. This means they will only give up as much knowledge as they have to in order to gain something of value like a paycheck, a product or a contract.
In my last post I talked about the value of Trust. Let’s assume for a minute that you are actually able to gain enough trust to gather sufficient knowledge, now what? Now that you’ve mined that raw data you need to turn it into something. This is where collaboration comes in.
As companies continue to rely on remote and mobile workforces our ability to collaborate has been hampered and becomes expensive and difficult. This yields lower returns comparable to the level of investment. Which in turns causes companies to kill potential breakthrough innovations much sooner.
Social Media has huge payoffs in all of these areas. Social Media allows companies to open up and place trust in their employees and customers which in turn yields more trust. Social media allows for the gathering, storing and sharing of knowledge as well as facilitating communication and collaboration across multiple regions and stakeholders.
Among other benefits, this social media centric approach lowers the overall costs and increases the output making it easier to invest in, what in the short term seems like, smaller innovations but may actually have larger returns in the end.
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